The Airline Operators of Nigeria (AON) have called on the Nigeria Civil Aviation Authority (NCAA) to develop a mechanism for collecting its five per cent Ticket Sales Charge (TSC) and Cargo Sales Charge (CSC) directly from passengers, in a bid to end recurring disputes over remittances and growing indebtedness within the aviation industry.

The appeal follows concerns raised by the NCAA over its financial challenges, including difficulties in funding key projects and meeting obligations to its workforce of more than 1,500 employees. The regulatory agency has attributed the situation largely to unpaid accruals from the charges, which it said have accumulated to over N20 billion.

AON argued that the current arrangement, under which airlines collect the charges on behalf of the NCAA, has become unsustainable given the financial pressures facing operators.

The association pointed to the model adopted by the Federal Airports Authority of Nigeria (FAAN), which resolved similar disagreements by collecting its Passenger Service Charge (PSC) directly from travellers through a prepaid sticker system purchased by airlines.

According to airline operators, a similar framework would eliminate disputes over remittances and reduce the burden on carriers.

Responding to the proposal, NCAA’s Director of Public Affairs and Consumer Protection, Michael Achimugu, acknowledged that direct collection could be considered in the future but stressed that existing laws currently require airlines to collect the charges on behalf of the authority.

He explained that any change to the arrangement would require amendments to the Civil Aviation Act.

“Protocols can evolve, and with technology many options are possible. However, the law currently mandates airlines to collect these charges. Any alternative arrangement would require legal amendments. Nevertheless, airlines must first address their outstanding debts to the authority,” Achimugu said.

He also hinted that discussions on the matter may already be underway, following a recent closed-door meeting involving the Minister of Aviation and Aerospace Development, Festus Keyamo, NCAA Director-General Captain Chris Najomo, and AON executives.

Airline operators maintained that the five per cent TSC is deducted from airline revenue rather than paid separately by passengers, arguing that the charge places additional financial strain on carriers already grappling with rising operational costs.

They noted that the sharp increase in aviation fuel prices, driven by geopolitical tensions in the Middle East, has significantly increased operating expenses and forced many airlines to rely on loans to remain in business.

According to industry sources, some airlines are borrowing funds at interest rates exceeding 30 per cent to sustain operations, while also accumulating debts to fuel marketers.

Operators further argued that the charge functions more as a revenue-generation mechanism than a cost-recovery fee and questioned its consistency with international aviation standards.

Industry stakeholders disclosed that revenue generated through the TSC and CSC contributes significantly to NCAA’s finances and federal government remittances.

However, analysts have cautioned that regardless of whether the charges are collected by airlines or directly by the NCAA, costs associated with collection, administration and financial management will remain.

Managing Director of Flight and Logistic Solutions Limited, Amos Akpan, said the central issue is determining who should bear those costs.

“If NCAA collects directly, it will incur administrative and service expenses. If airlines continue to collect on its behalf, they will bear banking and management costs. That question must be addressed if both sides hope to reach a lasting resolution,” he said.

Similarly, Executive Secretary of the Aviation Round Table (ART), Olu Fidel Ohunayo, described the disputed five per cent charge as distinct from regulatory service fees, noting that many airlines had previously maintained dedicated accounts from which NCAA deductions were made until soaring fuel costs disrupted the arrangement.

He argued that the debt burden largely accumulated after the sharp increase in aviation fuel prices triggered by the conflict involving Iran, Israel and the United States, which placed additional financial pressure on airlines worldwide.

As discussions continue, stakeholders are calling for a sustainable solution that balances the financial needs of the NCAA with the operational realities facing Nigeria’s airline industry.